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Excise Tax vs. Income Tax — 2 Comments

  1. Dave, I’m with you on the complete overhaul of the tax system. I’m not sure about a banking excise tax thru banking transactions though. There would be a lot of questions to answer. The first one that comes to mind is actually a current situation. What better incentive would there be for wealthy people to do their banking off shore where the banks aren’t very keen on playing tax collector to the US government? I also have a general problem with involving banks in anything having to do with government and tax payer money. I think they already do quite enough. With that sort of system some smart guy in the banks will somehow figure out how to turn that situation in their favor. It’s what they do and they’re very good at it.

    I’ve always been in favor of a straight up federal sales tax provided all other streams of revenue are abolished. The structure and systems are already in place in all but I believe one or two states. That places the power of collection back in the hands of the states and the responsibility to pay the federal government back to the states. It places the burden of taxation across the board and like your excise tax is quite progressive but still allows choice in the level of tax you wish to pay. You feel you can’t be seen wearing a pair of $20 Walmart sneakers it’s going to cost you to lace up your Air Jordans (or whatever the new in folks wear). Most states already exempt necessities such as food and housing from sales tax so there wouldn’t be much impact on the poor and if there is a significant impact they aren’t really that poor are they?

    Another benefit is that every time you buy a Starbucks coffee it’s there in bold print what the government took from you. Everyone will instantly know every day what it means to be a “tax payer”.

    And the biggest benefit is that it would force the government to be concerned with nothing but promoting commerce within the country. It’s the only way they can collect what they think they need.

    Granted there would be kinks to iron out like I believe in a housing exemption from sales tax, but maybe not on the whole amount of a 5 million dollar mansion. Some necessary items would have to be exempt up to only a base amount.

  2. I do have to add that I would only support this in conjunction with the repeal of the constitutional amendment authorizing the direct taxation of people. We want to change the source of revenue. Not add another one.

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